Functional Modules of ERP Software

ERP software is made up of many software modules. Each ERP software module
mimics a major functional area of an organization. Common ERP modules include
modules for product planning, parts and material purchasing, inventory control, product
distribution, order tracking, finance, accounting, marketing, and HR. Organizations
often selectively implement the ERP modules that are both economically and technically
feasible.

ERP Production Planning Module

In the process of evolution of manufacturing requirements planning (MRP) II into ERP,

while vendors have developed more robust software for production planning, consulting
firms have accumulated vast knowledge of implementing production planning module.
Production planning optimizes the utilization of manufacturing capacity, parts,
components and material resources using historical production data and sales
forecasting.

ERP Purchasing Module

Purchase module streamlines procurement of required raw materials. It automates the

processes of identifying potential suppliers, negotiating price, awarding purchase order
to the supplier, and billing processes. Purchase module is tightly integrated with the
inventory control and production planning modules. Purchasing module is often
integrated with supply chain management software.

ERP Inventory Control Module

Inventory module facilitates processes of maintaining the appropriate level of stock in a

warehouse. The activities of inventory control involves in identifying inventory
requirements, setting targets, providing replenishment techniques and options,
monitoring item usages, reconciling the inventory balances, and reporting inventory
status. Integration of inventory control module with sales, purchase, finance modules
allows ERP systems to generate vigilant executive level reports.

ERP Sales Module

Revenues from sales are live blood for commercial organizations. Sales module
implements functions of order placement, order scheduling, shipping and invoicing.
Sales module is closely integrated with organizations' ecommerce websites. Many ERP
vendors offer online storefront as part of the sales module.

ERP Market in Module

ERP marketing module supports lead generation, direct mailing campaign and more.

ERP Financial Module

Both for-profit organizations and non-profit organizations benefit from the

implementation of ERP financial module. The financial module is the core of many ERP
software systems. It can gather financial data from various functional departments, and
generates valuable financial reports such balance sheet, general ledger, trail balance,
and quarterly financial statements.

ERP HR Module

HR (Human Resources) is another widely implemented ERP module. HR module

streamlines the management of human resources and human capitals. HR modules
routinely maintain a complete employee database including contact information, salary
details, attendance, performance evaluation and promotion of all employees. Advanced
HR module is integrated with knowledge management systems to optimally utilize the
expertise of all employees.

ERP Finance Module

All kind of organizations small scale, large scale organizations benefit from the implementation of ERP
finance module. The financial module is the core of many ERP software systems. It can gather financial
data from various functional departments, and generates valuable financial reports such general ledger,
trail balance, as balance sheet and quarterly financial statements.
This module of the ERP software will take care of all accounts related entries and their impact on the
whole system. How the finance comes and how it is been utilized. Total flow of money (Cash/Bank) and
total expenditures will be reflected here. As an after effect of this, the management will be able to take
their important financial decision, Budgeting etc. They can come to know about company’s financial
position at any point of time. All sorts of important financial reports i.e. Trial Balance, Trading A/c, Profit &
Loss A/c, Balance Sheet, Debtor’s Balance, Creditors Balance, Cash/Bank Fund position and many more
are covered in this module.

General Ledger

The General Ledger module is the foundation of your accounting system, with flexibility that meets the
current and future financial management requirements of organizations of all types and sizes. It provides
a robust feature set designed to handle your most demanding budgeting and processing needs. General
Ledger fully integrates with all modules and is the key to maximizing the efficiency and accuracy of your
financial data.

G/L Security

The G/L Security module enables organizations to control which users can view or use certain general
ledger accounts based on segment validation in G/L Security settings.

G/L Consolidations

G/L Consolidations lets you transfer and merge General Ledger account and transaction information
between separate company and branch office locations. It is also designed to enable subsidiaries and
holding companies to run without being on the same network or accounting database. G/L Consolidations
provides a feature set that allows your company to define the level of detail to consolidate and provides a
comprehensive audit trail.

Intercompany Transactions

The Intercompany Transactions module lets you enter General Ledger and Accounts Payable
transactions that affect more than one company by automatically distributing transactions across two or
more companies. In addition, its built-in flexibility automatically generates intercompany loan account
entries according to user-defined relationship tables called routes. Intercompany Transactions simplifies
and significantly reduces the amount of work required for intercompany accounting.

The Accounting Module is completely Transaction based unlike journal based. This implies most of the
accounting functions are handled through relevant transactions in other Modules there by saving lot of
time. The Module contains complete functionality required for any Accounting Department right from
vouchers to the Balance Sheet and Profit and Loss Account.

Budgeting and Variance Analysis between Budgeted and Actual figures helps in controlling the Enterprise
Expenses and Income efficiently. The Module also includes Cost Centres, which is completely flexible in
terms of defining Cost Centres and their components. Cost Allocations for General Overheads can also
be done on a pre-defined basis and required outputs could be generated for analysis purposes.
Outstanding of Payables and Receivables with Ageing Analysis of both debtors and creditors are some
the features of this module. Overall the module takes care of complete functions of any Accounting
department.

The function of this module starts with accounts creation. External departments like marketing or
purchase will create some of those accounts. Apart from regular voucher entries this module will help the
authority as well as other departments by providing financial figures. Final accounts will be generated
from this module. Documents like Receivable and Payable statements are generated from this module.
This module bridges between Sales & Procurement processes. All figures will be protected under
password. Only authorised person will be eligible to access information from this module.

Funds manipulations for a concern are important factor and some times it is treated as blood for an
organisation. So in this regard, sources of funds and application of funds are to be taken care of, by
defining Balance sheets, Schedules, General and Sub-Ledger, party and customer masters etc. Also the
various input transaction such as Voucher Entry, Credit/Debit entry, Cash/Bank receipts, Cash/Bank
Payment, Bank Reconciliation statements, Bill verification etc. Then finally different types of financial
reports, which can be of various types according to specified company standard.

ERP HR Module

Human Resources is another widely implemented ERP module. ERP HR module streamlines the
management of human resources and human capitals. HR modules routinely maintain a complete
employee database including contact information, salary details, attendance, performance evaluation and
promotion of all employees. Advanced HR module is integrated with knowledge management systems to
optimally utilize the expertise of all employees.

ERP HR modules, refers to the systems and processes at the intersection between human resource
management (HRM) and information technology. On the whole, these ERP systems have their origin on
software that integrates information from different applications into one universal database. The linkage of
its financial and human resource modules through one database is the most important distinction to the
individually and proprietary developed predecessors, which makes this software application both rigid and
flexible.

The HR management module is a component covering many other HR aspects from application to
retirement. The system records basic demographic and address data, selection, training and
development, capabilities and skills management, compensation planning records and other related
activities. Leading edge systems provide the ability to "read" applications and enter relevant data to
applicable database fields, notify employers and provide position management and position control.
Human resource management function involves the recruitment, placement, evaluation, compensation
and development of the employees of an organization. Initially, businesses used computer based
information system to:

• produce pay checks and payroll reports;

• maintain personnel records;
• pursue Talent Management.

In the transactions of the payroll module the user is allowed entering the daily attendance data of all the
employees of the company on the payroll. The user can mark the entire employee’s data as present or
absent. Also if the operator of the company has done any overtime then the user of the software can
enter the data relating to the operators overtime.

Also the processing of the pay roll and the attendance can be done in this module. The reports will
correctly specify the leaves and the attendance taken of the employee after the processing of the
attendance has been done.

The Work Time gathers standardized time and work related efforts. The most advanced modules provide
broad flexibility in data collection methods, labour distribution capabilities and data analysis features. Cost
analysis and efficiency metrics are the primary functions.
The Benefits Administration module provides a system for organizations to administer and track employee
participation in benefits programs. These typically encompass, insurance, compensation, profit sharing
and retirement.

ERP Production Planning Module, ERP Production Module

In the process of evolution of manufacturing requirements planning (MRP) II into ERP, while vendors
have developed more robust software for production planning, consulting firms have accumulated vast
knowledge of implementing ERP production planning module. Production planning optimizes the
utilization of manufacturing capacity, parts, components and material resources using historical
production data and sales forecasting.

ERP production module will just handle a tiny portion of production. The module begins with Product
creation. There will be a component master and stage master. This module is mainly designed to monitor
day-to-day production progress. On completion of any work order information will be passed on to
despatch for delivery. Reports on delivery schedule will be available in this module.

Production Planning helps an organization plan production with the optimum utilization of all available
resources. Material Requirement Planning is done based on the production advice generated by the sales
department. Feasibility of production is evaluated using details like raw material availability and
procurement time, machine availability and capacity. A production schedule is generated for all machines
where the scheduling is done in an optimized fashion based on the priorities of production.

Main features of Production and Production planning module:

Production module:

• Process definition with inputs, outputs, by-products and overheads

• Definition of Bill of Material for all products up to any number of levels
• Planning based on customer wise production advice and sales forecast
• Material requirement planning: MRP based on machine capacity and availability, machine
efficiency, raw material availability, lead time - giving feasible quantity for production
• Production plan for machines with optimum utilization of all available resources like raw materials
and machines
• Option to revoke production plan to change input parameters/ production priority/ quantity using
fresh production advice
• Generation of production schedule for machines detailing inputs and outputs
• Analysis of machine efficiency and utilization
• Automatic generation of MRS and purchase requisitions on finalization of plan
• Generation of process requisition for processes that have to be subcontracted
• Reserving quantity for production
• Automatic generation of job orders for production
• Option to make daily plans for production

Production Planning module:

• Process definition with inputs, outputs, by-products and overheads

• Definition of Bill of Material for all products up to any number of levels
• Planning based on customer wise production advice and sales forecast
• Material requirement planning: MRP based on machine capacity and availability, machine
efficiency, raw material availability, lead time - giving feasible quantity for production
 • Production plan for machines with optimum utilization of all available resources like raw materials
and machines
• Option to revoke production plan to change input parameters/ production priority/ quantity using
fresh production advice
• Generation of production schedule for machines detailing inputs and outputs
• Analysis of machine efficiency and utilization
• Automatic generation of MRS and purchase requisitions on finalization of plan
• Generation of process requisition for processes that have to be subcontracted
• Reserving quantity for production
• Automatic generation of job orders for production
• Option to make daily plans for production

Production Planning helps an organization plan production with the optimum utilization of all available
resources. Material Requirement Planning is done based on the production advice generated by the sales
department. Feasibility of production is evaluated using details like raw material availability and
procurement time, machine availability and capacity. A production schedule is generated for all machines
where the scheduling is done in an optimized fashion based on the priorities of production.

ERP Purchasing Module

ERP Purchasing module streamline procurement of required raw materials. It automates the processes of
identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing
processes. Purchase module is tightly integrated with the inventory control and production planning
modules. Purchasing module is often integrated with supply chain management software.

Features of purchasing module:

• Streamlines purchase and process cycles

• Detailed Supplier/Subcontractor/Service Provider database
• Capturing materials requirement
• Automatic firing of purchase requisitions based on MRS
• Quotations from various suppliers
• Recording Payment terms in PO
• Excise consideration in Purchase and Process Orders
• PO authorization
• PO amendments with complete amendment history
• Order cancellation and order closing
• Multiple delivery schedules
• Quality inspection of goods
• Quotation validity
• MIS for vendor evaluation based on quality, price & delivery time
• Subcontracting – generation of process orders
• Multiple indents for multiple items in a single PO
• Purchase order processing
• Purchase order entry with item details and other details like taxes, discounts, extra charges like
freight, P&F, octroi etc.
• Flexibility to generate Purchase Order in domestic and foreign currency
• Advance adjustments
• Purchase bill with updating of GL and purchase book
• Service contracts, Service Bills, Service indents and PO
• Value based approval of indents
• Bill of Entry
 • Complete import functionality with handling of custom details - Purchase Bill for import, Excise
consideration in imports
• Reports for Order tracking for complete control on the procurement cycle

ERP Purchasing module aims at making available the required materials of the right quality, in the right
quantity, at the right time and at the right price, for the smooth functioning of the organization. All
purchasing and subcontracting activities such as inviting quotations, supplier evaluation, placing purchase
order, order scheduling and billing are covered in this module. Import of goods is also handled by the
system.

ERP Inventory Module

ERP Inventory module facilitates processes of maintaining the appropriate level of stock in a warehouse.
The activities of inventory control involves in identifying inventory requirements, setting targets, providing
replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and
reporting inventory status. Integration of inventory control module with sales, purchase, finance modules
allows ERP systems to generate vigilant executive level reports.

Features of Inventory Module:

• Online status of item quantity in terms of on-hand, on-hand, available, reserved, ordered, to
order, rejected, defective and reworkable quantities.
• Complete excise functionality and generation of excise registers
• Multiple levels of classification of items
• Quality Control based on QC parameters
• Handling Material Rejections
• Rejected Material dispatch to subcontractors
• Linking of GRN to PO and Invoice
• Gate pass – returnable/non returnable
• Cenvat claim for capital goods
• Analysis which help in maintaining optimum stock levels
• Physical verification of stock
• Reallocation of reworkable stock
• Multiple warehouses/branches/regional offices
• Stock transfer – receipts from other warehouse
• Excisable items – Definition and Chapter allocation
• Multiple units of measurement
• Alternate items for Production Planning
• Handling of non-stock low value items like stationery
• Lot wise tracking of inventory at shop floor and main stores
• Stock Valuation – LIFO/FIFO/weighted average
• Material Requisition from different requirement areas
• Purchasing and subcontracting
• Receiving material against sales order processing, material requirement, subcontracting, gate
pass and production requisition
• Landed Rate of Items
• Consolidation of all warehouses
• Consolidation at any level of company hierarchy

ERP inventory module covers all stock related functions of an organization. Stock management and
valuation activities, which form the backbone of any organization generally, take a lot of time and
resources. M- wan Inventory handles all the store activities of issues, dispatches, receipts and quality
control. The lot wise stock of each item is maintained and various MIS are provided for tracking stock
movement.

ERP Sales Module, ERP Marketing Module

ERP Sales module implements functions of order placement, order scheduling, shipping and invoicing.
Sales module is closely integrated with organizations' ecommerce websites. Many ERP vendors offer
online store front as part of the sales module. ERP marketing module along with CRP supports lead
generation, direct mailing campaign and other marketing works. Scheduling of the promotion is possible
using this.

Features of sales and marketing module:

• Handles pre-sales and sales activities of the organization
• Complete stock-to-dock tracking of sales order processing cycle
• Sales Force Automation – Prospect tracking through various stages, detailed competitor products
information location-wise, scheduling marketing executives’ visits, tracking expenses
• Marketing surveys for estimating demand for various products to prepare an effective marketing
strategy
• Detailed Customers/ Business Partners/ Dealers database including bank details, TDS details,
contact details and credit limit
• Target setting for executives
• Order amendment history
• Authorization of orders and invoices
• Order scheduling over a period of time and tracking delivery schedule
• Order tracking through status and transaction reports
• Generation of production advice to plan for production based on sales orders
• Order processing based on MRP
• Preparation of dispatch advice
• Multiple dispatches against single Sales Order
• Invoice generation with advance adjustments – sales voucher automatically generated in Finance
• Tracking sales returns
• Association of customers to Marketing Executives and Business Partners for tracking
• Flexibility to define customer-specific prices for products and reference to customer part no.
• Multiple dispatch location for customers/dealers
• Complete export documentation for export oriented companies
• Excise details (chapter no. associated with excisable products)
• Enquiries from potential and existing customers
• Quotations and amendments to quotations with complete history
• Analyzing lost jobs
• Different types of orders can be generated to suit varied needs of customers
• Order entry for direct/scheduled/open/D3/sample orders with details for Dealers, incentive % and
competition
• Order calculation based on price offered, discounts (line and total), excise, taxes, freight etc.
• Letter of credit details for association with sales orders
• Rejection invoice for rejections made against purchases with excise consideration
• MIS for analyzing sales trends to project and forecast sales
• Stock Transfer between warehouses for multi-location companies
• Service invoice for services given to customers
• Variance reports
• Enables top view - consolidation of sales data for all child companies
• CRM integration through Internet – posting enquiries and sales orders on web by customers.
Importing the same into ERP after validations.

ERP Sales module is the most important and essential function for the existence of an
organization. Sales handle all the activities for domestic and export sales of an organization. The
customer and product database is maintained. Capturing enquiries, order placement, order
scheduling and then dispatching and invoicing form the broad steps of the sales cycle. Stock
transfer between warehouses is also covered. Besides all this, important analysis reports are
provided to guide decision making and strategy planning. Export documents are also generated.